THE WORLD’S WEALTHIEST people could have over €700 billion hidden from international tax authorities – keeping it shielded in Irish financial institutions.
That’s according to Oxfam Ireland, which has warned that the new focus on corporate tax avoidance should not distract from the methods used by wealthy individuals to avoid income tax payments.
The charity says wealthy individuals have personal wealth totalling €14.3 trillion, held in 52 ‘tax havens’ around the world – and estimates that €707 billion of this may be held in Ireland.
Oxfam believes the wealth is tied up either in deposits, or through offshore companies which hold the assets on the person’s behalf.
In most cases, it says, those companies are ‘run’ by nominee directors who do not have any real management function – while the companies themselves were owned by another offshore jurisdiction, to further complicate any attempt at uncovering the assets.
Oxfam’s estimate is based on figures drawn on deposit statistics from the world’s central banks, subtracting the Central Bank of Ireland’s figure for the amount of deposits held by domestic savers.
This figure was then compared with data from Credit Suisse, which produces estimates of the total financial wealth in the world, to calculate the percentage of assets which might be deliberately obscured in order to avoid taxation.
The OECD does not consider Ireland a ‘tax haven’ – basing its classification on factors like transparency and corporate reporting practices – but Oxfam says that if US standards were applied, Ireland would be one of 52 territories around the world which are subject to tax exploitation.
The charity estimates that the world’s governments are losing €120 billion a year by allowing wealth to be obscured in tax havens – illustrating that extreme poverty throughout the world could be ended with less than half that amount.
“This isn’t just an Irish problem. It is a worldwide problem,” said Oxfam Ireland chief executive Jim Clarken. “Governments are not sharing information or making clear who owns what where.”
Oxfam has called for extra EU efforts to stop individuals and corporations from being able to avoid tax.